Question 1

The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 2

If quantity demanded is greater than quantity supplied,then according to the market process:

Accepted Answer

A)  an excess supply exists. 
B)  the market is in equilibrium. 
C)  the price will rise. 
D)  the supply curve must be vertical. 
E)  there will be no tendency for the situation to change. 
A)  an excess supply exists. 
B)  the market is in equilibrium. 
C)  the price will rise. 
D)  the supply curve must be vertical. 
E)  there will be no tendency for the situation to change.

Question 3

Other things being equal,a fall in the price of Coca-Cola will increase the quantity of Coca-Cola demanded.

Accepted Answer

A) True 
 B)False

Question 4

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000,then:

Accepted Answer

A)  there is an excess supply of 25,000 units of milk. 
B)  the price of milk will tend to rise to clear the market. 
C)  consumers get the milk they want so market equilibrium exists. 
D)  there is an excess demand of 25,000 units of milk. 
E)  this is the intersection of market supply and demand curves. 
A)  there is an excess supply of 25,000 units of milk. 
B)  the price of milk will tend to rise to clear the market. 
C)  consumers get the milk they want so market equilibrium exists. 
D)  there is an excess demand of 25,000 units of milk. 
E)  this is the intersection of market supply and demand curves.

Question 5

If pork and beans is an inferior good,other things being equal,an increase in consumer income will decrease the demand for pork and beans.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 3-8 Demand and supply data for radios
  
-In Exhibit 3-8,at any market price of radios below $50,a(n)____ would result,causing price to ____.

Accepted Answer

A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall 
E)  surplus; rise 
A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall 
E)  surplus; rise

Question 7

If the price of tea is below its equilibrium level,then:

Accepted Answer

A)  the demand for tea will decrease. 
B)  the market for tea has cleared. 
C)  sellers will be stuck with unsold tea. 
D)  there is a shortage of tea. 
A)  the demand for tea will decrease. 
B)  the market for tea has cleared. 
C)  sellers will be stuck with unsold tea. 
D)  there is a shortage of tea.

Question 8

A surplus in a market exists when there is an excess quantity demanded.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 3-8 Demand and supply data for radios
  
-In Exhibit 3-8,if there is a surplus of radios of 200 units,the current price of radios must be;

Accepted Answer

A)  $60. 
B)  $55. 
C)  $50. 
D)  $45. 
E)  $40. 
A)  $60. 
B)  $55. 
C)  $50. 
D)  $45. 
E)  $40.

Question 10

Exhibit 3-10 Demand and supply curves
  
-In Exhibit 3-10,which of the following is true about this graph?

Accepted Answer

A)  When the price is $4, there is an excess supply. 
B)  When the price is $8, there is an excess demand. 
C)  When the price is $4, excess supply is greater than excess demand. 
D)  When the price is $8, excess demand is greater than excess supply. 
E)  When the price is $6, there is no excess demand or excess supply. 
A)  When the price is $4, there is an excess supply. 
B)  When the price is $8, there is an excess demand. 
C)  When the price is $4, excess supply is greater than excess demand. 
D)  When the price is $8, excess demand is greater than excess supply. 
E)  When the price is $6, there is no excess demand or excess supply.

Question 11

The use of a price system eliminates:

Accepted Answer

A)  scarcity. 
B)  equilibrium. 
C)  shortages and surpluses. 
D)  changes in supply and demand. 
A)  scarcity. 
B)  equilibrium. 
C)  shortages and surpluses. 
D)  changes in supply and demand.

Question 12

A shortage of product means a(n):

Accepted Answer

A)  excess supply of the product. 
B)  excess demand of the product. 
C)  situation where the quantity demanded is less than the quantity supplied. 
D)  situation where the quantity supplied exceeds the quantity demanded. 
E)  situation where the current market price is too high. 
A)  excess supply of the product. 
B)  excess demand of the product. 
C)  situation where the quantity demanded is less than the quantity supplied. 
D)  situation where the quantity supplied exceeds the quantity demanded. 
E)  situation where the current market price is too high.

Question 13

If movies are an inferior good,movie attendance will rise when consumer incomes fall.

Accepted Answer

A) True 
 B)False

Question 14

When the price of a good in a market is above equilibrium:

Accepted Answer

A)  the quantity supplied exceeds the quantity demanded. 
B)  a surplus is observed. 
C)  the price will fall in the near future. 
D)  all of the above. 
A)  the quantity supplied exceeds the quantity demanded. 
B)  a surplus is observed. 
C)  the price will fall in the near future. 
D)  all of the above.

Question 15

Demand curves slope downward to the right.

Accepted Answer

A) True 
 B)False

Question 16

Exhibit 3-13 Supply and demand curves
  
-Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

Accepted Answer

A)  Diagram A. 
B)  Diagram B. 
C)  Diagram C. 
D)  Diagrams A and C. 
A)  Diagram A. 
B)  Diagram B. 
C)  Diagram C. 
D)  Diagrams A and C.

Question 17

Exhibit 3-7 Demand and supply curves
  
-In Exhibit 3-7,if price happened to currently be $25 in this market,a ____ would result,causing a(n)____ in price.

Accepted Answer

A)  shortage; increase 
B)  shortage; decrease 
C)  surplus; increase 
D)  surplus; decrease 
E)  scarcity; stabilization 
A)  shortage; increase 
B)  shortage; decrease 
C)  surplus; increase 
D)  surplus; decrease 
E)  scarcity; stabilization

Question 18

Assume Qs represents the quantity supplied at a given price and Qd represents quantity demanded at the same given price.Which of the following market conditions produces an upward movement of the price?

Accepted Answer

A)  Qs = 1,000, Qd = 750. 
B)  Qs = 750, Qd = 750. 
C)  Qs = 750, Qd = 1,000. 
D)  Qs = 1,000, Qd = 1,000. 
A)  Qs = 1,000, Qd = 750. 
B)  Qs = 750, Qd = 750. 
C)  Qs = 750, Qd = 1,000. 
D)  Qs = 1,000, Qd = 1,000.

Question 19

An equilibrium price is unaffected by nonprice factors.

Accepted Answer

A) True 
 B)False

Question 20

If the current price of a good is the same as that found at the intersection of the market demand and supply curves,then:

Accepted Answer

A)  excess demand exists. 
B)  excess supply exists. 
C)  price will rise. 
D)  price will fall. 
E)  the market is in equilibrium. 
A)  excess demand exists. 
B)  excess supply exists. 
C)  price will rise. 
D)  price will fall. 
E)  the market is in equilibrium.

Exam 3: Part 2: Market Demand and Supply

The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

If quantity demanded is greater than quantity supplied,then according to the market process:

Other things being equal,a fall in the price of Coca-Cola will increase the quantity of Coca-Cola demanded.

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000,then:

If pork and beans is an inferior good,other things being equal,an increase in consumer income will decrease the demand for pork and beans.

Exhibit 3-8 Demand and supply data for radios -In Exhibit 3-8,at any market price of radios below $50,a(n)____ would result,causing price to ____.

If the price of tea is below its equilibrium level,then:

A surplus in a market exists when there is an excess quantity demanded.

Exhibit 3-8 Demand and supply data for radios -In Exhibit 3-8,if there is a surplus of radios of 200 units,the current price of radios must be;

Exhibit 3-10 Demand and supply curves -In Exhibit 3-10,which of the following is true about this graph?

The use of a price system eliminates:

A shortage of product means a(n):

If movies are an inferior good,movie attendance will rise when consumer incomes fall.

When the price of a good in a market is above equilibrium:

Demand curves slope downward to the right.

Exhibit 3-13 Supply and demand curves -Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7,if price happened to currently be $25 in this market,a ____ would result,causing a(n)____ in price.

Assume Qs represents the quantity supplied at a given price and Qd represents quantity demanded at the same given price.Which of the following market conditions produces an upward movement of the price?

An equilibrium price is unaffected by nonprice factors.

If the current price of a good is the same as that found at the intersection of the market demand and supply curves,then:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exhibit 3-8 Demand and supply data for radios -In Exhibit 3-8,at any market price of radios below $50,a(n) would result,causing price to .

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7,if price happened to currently be $25 in this market,a would result,causing a(n) in price.